Marketing Policies

With the developments taking place, agriculture is becoming more and more market oriented. It is said that Production, Processing and marketing are the 3 pillars of the agricultural economy in India.

Basically, agricultural production is scattered and is a small-scale production, which create problems of marketing. In addition, the infrastructure facilities like roads, means of transport, storage facilities, etc. are scarce on our rural areas.

In India, there are large number of markets which are not regulated under the Marketing Acts. The regulated markets are very few in number. The unregulated markets are in the hands of commission agents or Dalats. There are many defects in these markets, they charge high commission, no open auction `( hatta’ system), no proper weighment, umber of deductions, no prompt payment, etc.

Co-operative marketing is another remedy for ills in agricultural marketing which is gaining importance in some areas. They are also arranging for exports.

 

Importance of Marketing and Peculiarities of Agricultural Produce:

With the developments that are taking place in recent years, agriculture in India is becoming more and more market oriented. With the onset of Green Revolution and Subsequent White Revolution, the problems of marketing are becoming more serious. It is said that production, processing and marketing are the three pillars of the agricultural economy in India.

Before we deal with the marketing policies, it is necessary to throw some light on the peculiarities of the agricultural produce. In the first place, the volume of agricultural produce is larger in relation to its price. Another important characteristic is the perishable nature of agricultural produce. Milk, Vegetables, Fruits, etc. are more perishable and are required to reach to the Consumers as quickly as possible. Even the grains, if not dried and stored properly are attacked by the store grain pests in a few days. Infrastructure facilities such as roads, transport, storage, etc are very much inadequate in our rural areas. Small holdings and large number of producers scattered over a wider area, is another feature. All these peculiarities create problems in marketing of agricultural produce.

Defects in the Marketing of Agricultural Produce

We have already referred to the problems such as small holdings resulting in small quantities of marketable surplus and lack of infrastructure facilities. In addition, our farmers usually do not grade their produce. As a result, they do not get remunerative price. At present, major of our markets are unregulated and are dominated by the Commission agents, brokers or `Dalals’. In these markets, many a times, there is no open auction. The price is fixed by the Commission agent and the retailers (Purchaser) under the cover of cloth by making signs on the palm (Hatta system). Thus, even though the farmer is present there, he cannot know the real price at which his produce is sold. The Commission agents exploit the farmers by using many fraudulent means. They charge heavy commission, use faulty weights and measures and have number of deductions. Farmers also lack in information about other markets and prices prevailing there.

Measures adopted by Government to improve the Marketing:

Government has taken various steps to improve the conditions of agricultural marketing in the country.

Attempts are made to improve the roads and communication facilities in the rural areas thorough the development programmes under Five year Plans, Central and State Warehousing Corporations encourage construction of warehouses and godowns village Co-operative societies are given necessary technical and financial help for construction of godowns. Farmers can store their produce in these warehouses and can get loans on that security.

Food grains prices are stabilized by declaring the Minimum Support Prices for the selected commodities, before the sowing season.

The Department of Marketing, Govt.of India, had undertaken `Marketing Surveys’ for various commodities. These surveys brought out the problems of marketing and suggested the remedial measures. These Surveys served as the basis for the policies in the subsequent period.

In the field of grading and standardization under the `Agricultural Produce (Grading and Marketing) Act’, grades and standards are fixed for may goods like ghee, flour, eggs, etc. The graded goods are given a seal "AGMARK" by the Agricultural Marketing Department. For testing purpose, quality control laboratories are also established.

Two significant remedies for many ills in the marketing of agricultural produce, are the Regulated Markets and the Co-operative Marketing, which we discuss below in brief.

Regulated Markets:

The regulated markets are established as per the provisions of the `Marketing of Agricultural Produce Acts’ of the State Government. The Commodities with which the market will deal, are also declared.

Regulated markets aim at the development of marketing structures to ensure remunerative prices to the producers and to narrow down the price spread between the producer and the consumer. It also aims at reducing the non-functional margins of the commission agents.

For controlling the activities of the marketing, there is a `Market Committtee’. The Committee consists of representatives of the farmers, commission agents and the Government nominees. The complete management of the market rests with the `Market Committee’. The Committee issues licences to the Commission Agents, weighmen, and other functionaries. The rate of Commission to be charged is fixed by the Committee. Weighment is done properly by the weighmen appointed by the Committee. There is an arbitration Sub-Committee to look into the grievances of the farmers.

With the establishment of regulated markets, many fraudulent practices of the brokers are observed in the unregulated markets are overcome and the farmers get reasonable price for their produce. Not only this, amenities like rest house, place for parking of vehicles, cold-storages, etc. are also created in the market yards for the benefit of the farmers. In this respect, Government Policy is to have rapid expansion of the regulated markets in the country.

Co-operative Marketing:

Prior to 1954, separate co-operative marketing societies were established as distinct from the co-operative credit societies. However, since 1957, policy was adopted to have `Multipurpose Co-operative Societies" undertaking both functions of supply of credit as well as marketing of agricultural produce. The co-operative marketing societies can link credit, farming, marketing and processing to the best advantage of the farmers. It can have its own storage and warehousing facilities. The most important advantage of the co-operative marketing is that it can eliminate many of the middleman and their profit margins. The co-operative marketing societies can link credit, farming, marketing and processing to the best advantage of the farmers. It can have its own storage and warehousing facilities. The most important advantage of the co-operative marketing is that it can eliminate many of the middlemen and their profit margins. The co-operative marketing society can also undertake supply of inputs such as seeds, fertilizers, implements, etc required by the farmers. Thus, co-operative marketing is the best method to reorganize rural marketing and to promote planned growth of our rural areas.

At present, there are over 60,000 primary co-operative marketing societies of which 3500 are special commodity marketing societies. At the district level, there are 160 Central Marketing Societies. At the State level, there are 29 general purpose State Level Co-operative Marketing Federation. (NAFED). In additions, there are 8 State Level Trade Co-operative Development Corporations/Federations.

In 1990-91, the co-operative marketing societies marketed agricultural produce worth Rs.6300 crores. Punjab, Maharashtra, Uttar Pradesh and Gujarat States accounted for 75 per cent of the total value of the agricultural produce marketed by co-operatives. The three major commodities which accounted for about 75 percent of the total sales are foodgrains, sugarcane and cotton.

The co-operatives have made a good progress in recent years in the field of agricultural processing. The co-operative sugar factories in Maharashtra have made tremendous progress. Similar, is the case of co-operative dairy development.

The National Co-operative Development Corporation (NCDC) was established in 1963 under the Act of Parliament, with the object of planning and promoting programmes for the production, processing, storage and marketing of agricultural produce and notified commodities through co-operative societies. The Corporation has initiated number of new schemes for which assistance is provided to the State Governments.